Democratic Attorneys General Support DOL’s Fight For Narrower Definition Of ERISA Health Plans

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  • A group of 22 Democratic AGs, led by District of Columbia AG Karl Racine, filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit in S. Department of Labor v. Data Marketing Partnership, No. 20-11179, in support of the Department of Labor’s (“DOL”) position that the district court erred in determining that a program through which users obtain health insurance in exchange for personal data is an “employee benefit plan” as defined by the Employee Retirement Income Security Act of 1974 (“ERISA”).
  • The case arose after DOL concluded that Data Marketing Partnership, L.P.’s program, which provides health insurance to thousands of individuals in exchange for allowing the collection and selling of any electronic data generated by these individuals while they are browsing the internet, did not qualify as an “employee benefit plan” under ERISA.
  • The brief argues that the district court erred by expanding the definition of an “employee benefit plan” under ERISA beyond its statutorily intended scope, which was limited to plans in genuine employment contexts. The brief further argues that expanding the definition of ERISA to this extent would allow opportunistic entities to avoid state regulation of health insurance plans that they sell to consumers by trying to disguise them as ERISA-based employee health plans because ERISA preempts state regulation of employee health plans. The brief points out that all three branches of the federal government have traditionally been careful to limit ERISA’s boundaries so not to usurp the states’ role in regulating insurance and protecting consumers.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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